Skip to main content

tv   Fast Money Halftime Report  CNBC  January 18, 2018 12:00pm-1:00pm EST

12:00 pm
are going to be in that shelter. it appears nobody welcomes necessarily a homeless shelter to their neighborhood, but it will be interesting to see what they do about it to improve the situation about everybody. >> if you think valuations are getting stressed, $10,000 per square foot for prime real estate in manhattan. it's crazy >> it is boeing added a hundred points to the dow yesterday, taking away about 70 now let's get to the judge and welcome to "the halftime report." i'm scott wapner this half hour, why some say volatility is about to come back in a big way with us, steve weiss, jon and pete najarian, kevin o'leary, and with us on set, our senior economics reporter steve liesman. we begin with the markets today, what's already been a wild week. the dow traveling an astounding 1,500 points in the last four sessions, hitting a new high
12:01 pm
earlier today before turning negative we're just off the lows of the day. rates are in focus the ten-year is pushing past two six. pete, what's happening we erase a 280-point gain the other day. then we go up more than 300. then today we find ourselves falling as we speak. >> a little slipping >> welcome to the new world of the market >> welcome to the new world, and you talk about 1,500 points, that's why we're seeing the volatility rise the way we're seeing it. this is significant. these moves are huge they have volume behind them i was talking about the volumes the other day in the options world. 24 million, 37 million contracts over the last three sessions so volatility is here, scott i wouldn't be surprised if we start to see a new range for volatility everybody has been expecting it. but we get these kind of moves, and we still have plenty of different political reasons for the stock market to move, along with where i know, steve, in a note earlier today, was talking about what he's seen in the ten-year we're just at the start of
12:02 pm
earnings season. >> the vix is barely moving today, it's not as if the vix is ripping when stocks are sliding. >> no, but it was ripping when stocks were climbing one of the reasons for it, scott, we've had this binary bet on whether or not we hit the wall on friday, steve, with the government shutdown. yesterday, judge, as we were talking about it on the show, we said, hey, looks like from the reports we're getting out of d.c., that they're saying, thumbs up, not going to be a problem, we'll get through the shutdown, extend through february, then do it all over again. today there is a picmix. >> politico was reporting a short time ago that mcconnell was said to be preparing for a shutdown then it seemed as though stocks started to slip a little bit there. is this the way it's going to be, is this a new world of volatility that we're so not used to, it just is a little unsettling >> scott, i feel the return of an old friend that i missed for
12:03 pm
so long called volatility. i think this is great, because this confirms the market to me this tells me it's real, and it's actually sustainable. i've been waiting for this for a while. if you had shorted vxx in the first trading days, you made 10%. now the trend is in the other direction. if you look at it over the month, volatility is coming back, and it should, and i'm happy. this confirms we have a real market going >> we might not have it for much longer, kev. if we get through tomorrow, judge, and there is that kicking the can out to february, then watch how fast this goes right back to 10 as far as the vix >> 260 on the ten-year certainly got a lot of attention today, maybe that has a lot to do with why stocks are in the red. >> to me, that's the concerning factory, it should be the concerning factory for
12:04 pm
everybody. rates have typically ended rallies when they've risen quickly. those who are concerned are saying, look, 261, major technical level, 299, never get to there, major technical level. major technical levels are made to be broken if dragi cuts back further and raises, there will be less of a reason to come into u.s. treasuries i think that's still the risk. and the market always leads the fed. >> you feel like there's significant rate risk to the rally right now? >> not right now i think you've got to go at a couple of quarters real rates are still ridiculously low and extremely accommodative. creditors are sloshing around out there. you're repaying a lot of debt on the corporate side, repatriating that's creating a need for corporate debt which will be
12:05 pm
priced lower so i think we're okay now. i'm just suggesting you've got to watch it, because it will accelerate in my view faster >> the reason we have steve liesman at the desk -- >> because i'm a nice guy and good looking >> there's all kind of reasons >> can i just say, the makeup room ran out of makeup when they got to these four guys >> a lot of skin to cover. >> the fed has commented before about asset prices, asset bubbles in some cases. i'm wondering how they view what's taking place in the market and also as they're watching the ten-year eclipse to 60 for the first time in a while. >> every fed official i talk to, i ask about market levels. so far they do not seem to have a level of concern the question i asked janet yellen in the last press conference, where she said it's not red and it may not even be flashing yellow when it comes to market valuations.
12:06 pm
>> how is that possible when they consistently, some of them at least do, talk about asset prices being elevated, and the question is whether they're too elevated in the fed's mind >> some do, and they see it as reason to continue with these gradual rate increases the fed looks at the regulated banking system the one that could fall apart and grow up and create a systemic problem and bring the economy down they do not see the leverage in the system or they see the current valuations as something that threatens that system and we're looking for a black swan event when it comes to finances when it comes to the fed and the markets, so far the fed has been the friend of the markets. when i look at what's priced in right now, first hike priced in for march this year, second hike now priced for june, and,000 we have a greater than 50% probability that there will be a third rate hike in december. >> which the market has fine with >> and then i think about what is the potential worst case scenario there's a 15% probability of a fourth hike.
12:07 pm
but if you tell me that the fed is going to do another quarter, and that all of a sudden, current stock market valuations are not justified, then i think you're wrong about that. i think that this market is not going to be spooked. there's a psychological aspect steve talked about that, a quick rate rise. when i look at the fundamentals of the economy and this about a 3% ten-year and declining corporate yields which means the cost of interest to companies is going to be going down, i do not see the economy being spooked by higher rates right here. >> under what circumstance would the fed potentially -- i know this sounds crazy, but go 50 basis points >> i don't think they go 50 at a meeting. i think they could add one it's possible that one of the meetings, not the first one out of the box for powell, but maybe a second, would be 50. if you get a spike-up in inflation, if it's sustained for a while, and if you see, by the way, the fed chasing the market here, if the market believes in higher rates >> steve, if the question goes for 100 basis points, 25 a
12:08 pm
possible -- >> 225 would be your endpoint for this year, yes. >> and the ten-year stays at 256. does it stay below three then you've got that specter of that yield curve issue >> right >> you're going to have the reversal and traditionally, equities don't like that. >> the market is free to express its belief in the efficacy of federal reserve actions. you know, so i very well predicted the three rate hikes in 2017, i nailed the two-year what i didn't nail was 60 basis points of spread tightening on the ten-year >> what's your call on the ten >> i would think at a normal rate, if the fed goes up to two, it would be a 3% because i like this hundred basis points of spread between the two and the ten, which is a normal world to me >> i agree >> let me ask it this way. does anybody view what's happening in the bond market or
12:09 pm
in d.c. and thinking to themselves, maybe i need to rethink how bullish i've been feeling over the last weeks, what the tax plan will mean, where the economy will go, why i'm all of a sudden sitting back and saying, maybe i need to take a little off the table because it's starting to feel skittish >> i think that's the action in today's market as the bond market went through 260, look, the ten-year yield has increased by 10 bips in the last month you've got to be whistling past the graveyard. >> nobody is buying credits yet, you have to buy mid-caps, you are get a better yield >> i agree that he just a forecast or a look at things to come if you get that rapidity in raising, you'll see more pressure >> i'm just taking money off the table now to keep my portfolio balance in check i got a number, 65/35 is the way
12:10 pm
i balance my portfolio, stocks go up and i pare it back down. i'm just doing it naturally. >> into cash >> i did a little bit of tips and a little bit of fixed income >> great but what's driving it, what's more powerful than you and others -- >> i'm not moving the market >> i don't know. >> that's an ego that's an ego, huh >> but in all seriousness, it's the alcos that drive it. if yields are going higher, equities are coming lower. and then it resets, when it sees that -- >> it's going higher on credits. you're still getting two six on the triple b portfolio and you can get 3% dividend yield out of mid-cap stocks >> i don't disagree. but that's not what's driving the markets. what's driving the market is treasuries >> are we just venting worries here i don't know that the fed is really something that keeps these guys up at night >> it's not.
12:11 pm
>> the trend has certainly been -- maybe in fact we are it's a legitimate question to be asking if investors are getting too optimistic about the rally our mike santoli has been looking at that and join us from the new york stock exchange. michael? >> hey, scott. any way that you would typically measure investor sentiment, it's been flashing a warning sign for a couple of weeks now. if you talk about the low put call levels, all the survey work is basically up at multidecade highs in terms of bullishness. you talk about exposures of investors on the retail and institutional side, very low cash levels, very, very high in healthy equity exposures that was the case coming into this year. all that tells me is that's the makings of a random air pocket or a flattening of the market or maybe this isn't your best entry point at this particular point it explains to me the action we've seen in the last couple of days this is a higher velocity rally that we've seen in the last
12:12 pm
couple of weeks. that's why you get up to 85 by 10:00 a.m., lose it all, up 320 the next day and by the way, on no news, you can't really tie any of that to headlines, because i think right now the market is kind of captivated with itself, with its own momentum, with the raw power of the mali. that -- of the rally a little bit different than last year when you had clockwork rotation yes, i think sentiment is very stretched. but guess what, it's stretched because all the news is good it's not as if everyone is very bullish and by the way there's lots of danger signs people are ignoring i think it just kind of confirms the situation we're in it's really a question of how long can things stay good. i'm looking at the credit market response to potentially higher rates, not just the yields themselves going up. and the vix, if it closes above 13 when the market itself hasn't fallen very much, maybe that's telling you tell sparrows are
12:13 pm
starting to scatter and you should look for storm clouds >> the bottom line, and i think art kachin said it yesterday afternoon, nothing's changes you had this big fallaway from a 200-plus rally and you had this come back, if the market is really concerned about a government shutdown, down .4%, that doesn't say much to me. >> nothing has changed in the big picture. >> i agree >> generally the market has traded down on average .6% during a government shutdown, that's nothing to worry about. you've had that move intraday, so many days look, i think in terms of the fed, your question is, does anybody really care about the fed. i don't really care about the fed. >> you don't worry about it. >> i don't worry about it. i care about it. >> i care about them, but overall, the market, the fed is so transparent now and talks so much >> totally agree >> it false on deaf ears >> they've done a good job >> they have
12:14 pm
>> and an unheralded job, in becoming a nonissue. they lay out for the market -- >> which is what you want for the fed to be that way, don't you want them to be transparent? >> to a certain extent >> i don't want to know how the sausage is made, because then it falls on deaf ears, because then there's no import to what they say. >> it comes back to what we've been asking almost daily, whether we're too optimistic, or if we're not optimistic enough i think it's more of the latter. >> can i throw a question out? >> you have apple announcing, walmart, all these other companies paying their employees more >> it's still not figured had. >> do you feel like the tax cut is priced into this market >> no. >> i've still not seen the movement by those companies that seem like they're going to benefit most from the tax cut, on just a mathematical basis it's a very difficult thing to
12:15 pm
model how the tax cut will flow to the whole stock market. but you can look at a company, you can say they're a domestic company, they've not had these foreign overseas earnings. they have 35% taxes, going down to 21. there's a mathematical equation you can make i haven't seen the vaullues beig put on that group. >> i've seen models from analysts they're still holding corporations at 35% tax rates, they haven't even changed their models >> you've seen modest revisions but not enough of it >> it will be a gift that keeps on giving. >> the next question is the economy. we've done 3%. i don't think that's the run rate of the economy. i think it's more like 2.5 but hold on. hold on. >> debbie downer >> no, that's wrong. >> hold on we've done 2 perso% the last sel years. we've got a run rate of the economy estimated to be 1.8. you're telling me i'm doing an extra half a point on $18
12:16 pm
trillion >> that's right, debbie. >> if it is, i'm fine with that. but i'm telling you, 2 1/2 is a very good number it's a victory for the market. it's a victory for policy. it's a victory for what's happening. >> scott, there is in part your answer in part your answer is, everybody is scoffing that we're not at a 3% economy forever. >> silly >> every year we've been talking about the annual first quarter slowdown, we have a soft patch that would be the big surprise that up-ends everyone's expectation that all we have to worry about is overheating >> i think people are potentially still underestimating. they don't have a good earnings number, they don't have a good handle on the multiple >> 5% in 11 days >> when you compound at 5% at 11 days, you're building in lots of good stuff if that continues to be your trajectory if you're expecting what we got to be the run rate of the market, you're probably going to be disappointed. maybe people aren't positioned for that
12:17 pm
>> mike, every ceo we've heard from, from jamie dimon through the banks that we've heard from so far, has said that they are extending the impact of the tax cuts for what it will mean for their businesses so to all of our points, it's not priced in, or at least it's not priced in correctly. second of all, you just spoke of that 5.7% move that we've seen over four days, judge. and michael, you said is the stock market sniffing out something with the vix no, the market is responding to that 5.7% again, highs to lows, guys, as we surged 13 days for us to basically get through 26,000 i mean, when you're looking at that kind of thing, it's justified. if we didn't see it, you would be shocked so we're not shocked and now, to your point, we're not seeing much today, because all we have is a 24-hour wait for the window on shutdown >> if i told you that earnings were going to be at the high end of expectations, if not potentially even exceeding them,
12:18 pm
and that the yield on the ten-year was going to stay somewhere in the current range, maybe it goes up 10 to 20 basis points, you would probably all tell me the market is going to be higher. >> if that's true, we'll get another 20% in equities this calendar year. a lot of people are starting to come to the realization that that may be true 50% are starting to say, wait a second, we can get another 12 to 18% on equities if in fact it has been priced in, that all these mid-cap companies with domestic revenue have to be adjusted from 35, 36, down to 21 that's 15% more free cash flow that's what i'm betting on i think we may see that. frankly, i think in 12 months we'll have a run rate with -- >> the atlanta fed just moved up, four days ago they had it at 3.3. they just moved today to 3.4, judge. four days ago. all that's happened are the reports that we're talking about. in other words, people are still racheting up, including the fed, where they think we're going >> i didn't even throw in the buyback question, which is like
12:19 pm
a dirty word around here >> it's a big part of the potential impact of this tax cut, which is, apple yesterday writes its very vague press release that says it's going to be paying this tax money and it's going to be doing 20,000 in jobs and a whole bunch of investment we don't know how much is tied to it. here's the thing what we don't know is how much of this money ends up in buybacks and dividends >> take a guess. is it a third of everything that comes back >> i think it's two-thirds >> everybody at this table is competing with the cfo's for buyback. >> for political reasons, they're not announcing it now, they're talking about jobs and investment there is a wave -- >> $3 trillion >> you have to be careful with the language it's all coming home they are required -- not all of it they're required to pay -- and santoli knows more about this than i do. they're required to pay the tax
12:20 pm
on it. therefore it is all available, if they paid the tax on it, to buybacks they'll pay workers what workers are worth to them. there will be no bonuses and no wage increases that are not profitable for companies to give >> tim cook in an interview last night had all the opportunity in the world to say, we would be doing all of this no matter the tax plan or whatever, and he didn't he gave credit to the tax plan >> he said in large part it's because of the tax plan and a large part we would be doing it's like saying, two-thirds it's for this and two-thirds it's for that. >> my point is he didn't have to say anything >> scott scott. >> yeah. >> why wouldn't he say that? the tax plan is the catalyst for companies saying, look, we have this much cash that we have no excuse for not using, let's allocate it across these different fronts, employees, buybacks, dividends, m&a, whatever it's going to be.
12:21 pm
but apple allowed $50 billion to float to the bottom line they could have let $49 billion to float to the bottom line. it also has $100 billion of debts against the 230 in cash overseas this is a company that could have done anything but it's using the tax plan as a catalyst to say we're going to do something for all our constituencies it's a net positive for everybody but it's not a causal thing. >> mike, thanks, steve, thanks as well. senior economics reporter steve liesman. we're focused on shutdown possibilities at d.c our kayla tausche is there for the latest >> reporter: scott, republicans will work throughout the day to short up support for the short term funding bill ahead of the first vote at 7:00 tonight the governmebill would keep govt funded for six months. delays of certain obama care
12:22 pm
taxes would, they hope, win over the support of obamacare supporters the pentagon was voicing the same message the white house has reiterated its support for this bill and is not giving any cover to those who would vote against it. back to you. >> kayla, thank you very much. next, value investing superstar bill nigren is with us wait until you see what else he is buying. plus -- the call of the day. what's behind goldman sachs upgrading a big name and putting the stock in the conviction buy list plus two traders are making some big moves on ibm ahead of this afternoon's earnings report what should you do before the break, our data partners at kensho on how ibm fares after a quarterly report "halftime report" is back in two minutes. for your heart...
12:23 pm
your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish, prevagen is now the number one selling brain health supplement in drug stores nationwide. prevagen. the name to remember.
12:24 pm
12:25 pm
back with "the halftime report." the ge crush continues, shares down today, below 17 bucks for the first time since 2011. however, one value investor is sticking with it the portfolio manager of oakmark funds, live with us from chicago. bill, welcome. >> thank you >> we last saw you in the midst of ge turmoil. you told us you were staying with this story, that you still
12:26 pm
thought the stock represented good value a lot has happened since then. now there are talks about breaking up the company as early as this thing. where are you today on ge? >> it was clearly a swing and a mission last time i was on here. ge was the worst performing stock in our portfolio we own over 50 names and it was the absolute worst performer in the fourth quarter. at some time we would sell a stock in that situation. but in this case, tremendous change in people there's a new chairman, a new ceo, a new cfo, new head of the power division the problems were largely contained in the power division. the dollar of earnings that ge is expected to earn this year are coming from health care and aviation those businesses have been just fine they're industry leaders most of their earnings in those businesses come from services and replacement parts.
12:27 pm
we think they deserve better than average multiples the stock's at about a market multiple they've got assets that are for sale that they should be able to get good multiples of ebitda on, because ge isn't necessarily the most logical owner of those assets so we like the new people, and it's very hard to take a fresh look at something that's been this disappointing we think with the fresh look, ge deserves to be in the portfolio today. >> is that a way of saying as well that you've been buying more stock on these dips >> we've been buying and selling. at observing maaoakmark, when w company that has performed this closely, we've been rotating through adding shares, subtracting shares, so we can take our tax loss while we maintain our position. >> can i ask it this way, then
12:28 pm
is your position in ge today larger than it was before a lot of this turmoil and stock slides started to happen? >> more shares, smaller percent of the portfolio >> understood. the charge that ge took was larger than expected to a lot of people the analyst at jpmorgan, we've been referencing him so often because he's been on the right side of this trade when he looks at the impact of that, he suggests the fair value for this stock is maybe around 16 bucks others do sum of the parts and say 15 why are they wrong >> if you're doing a sum of the parts analysis, and we think that's an appropriate way to look at it, one of the most important issues is what multiple you put on the businesses and we think that the ge jet, the aviation business, the jet engines they make, we think that is one of the absolute best
12:29 pm
businesses long term contracts strong reliability. it's not based on the number of planes that get sold we put a higher multiple on that business than others do. same thing with ge health care i think it's really interesting that ge health care presented at jpmorgan's conference last week. first time they've ever done that, as a separate company. it's a good business it's not the old radiology business that people tend to associate with ge. it's a good, growing business, a good part of it is biotech we think it would get a higher multiple than the average health care business would. then you've got a power business that should have recovery potential, along with these other assets that don't fit look at those into those businesses at higher multiples. >> you've added a couple of stocks that i think are interesting. i'll get to those in a minute.
12:30 pm
what jumps out to me is you're out of microsoft why is that? >> if you're a long term value investor, you're doing a lot of things that are unpopular at the time you do them we've been in microsoft a long time, we brought it back at the time a new ceo was named at the company, when there was a fear that the cloud was going to get rid of their office business, which is such a good recurring stream of cash flow. microsoft's stock has done incredibly well. and it got to a price that we just thought other things offered better long term opportunities. and you look at some things we were able to repurpose that microsoft proceeds into, things like american airlines at less than ten times earnings, a company that's bought back a third of its stock until the past five years, great ceo cvs, one of the biggest
12:31 pm
beneficiaries of the tax law change in terms of -- >> along with the airlines >> right >> that's why i was thinking, when you're talking about airlines, certainly a big benefit. >> right and you guys were talking earlier about how slow some of the analysts have been to forecast new earnings levels we completely agree with you, and we think -- you see it almost each day, as companies arereporting earnings and giving guidance for 2018, that analysts were waiting for that event to change their earnings numbers. we think cvs is selling at barely a double digit p/e and is in the midst of an interesting conversion from a business that was a convenience store attached to a pharmacy to a health care delivery store where you'll see health care clinics, over the counter health care products as well as a pharmacy much less of a concern in that kind of business model that amazon is a threat to them and then the other name we added that's unusual for a value investor, price line >> right, price line >> if you look at price line and
12:32 pm
subbracktract off the price theh on their balance sheet and their investment in c-trip, you're paying less than a market multiple on a consensus for next year's earnings. with booking.com, they're one of the leaders in online travel it's an industry we think has a very strong tailwind and we see no reason that that business ought to sell at a discount to the market p/e >> i got you bill, always a pleasure. thanks for being here, see you again soon >> thank you >> bill nygren joining us from chicago as always. back to ge you wouldn't touch it? >> i own ge. >> bill has a great track record >> he does i have two questions about ge. this time last year, the company was guiding to about a buck 97 $2, okay then i don't know how this happened, but all of a sudden, within a matter of six months, it was a dollar gone,
12:33 pm
evaporated nobody pushed any buttons about that when did they know that? because i'm asking that as a shareholder, okay? how is it that they don't have a class action suit on that dollar that evaporated? bill made a point that there's been a lot of change in management i don't think so the new guy came out of the business he was part of that board. i haven't seen a lot of change on the board i'm putting up my hand saying, not so fast, kiddies, where did the dollar go? i want to know where the dollar went you're asking me to pay 17 times with basically the same crew running the show they whacked the head guy, deservedly so, i get that. but i'm back at what happened to the dollar tell me what happened to the dollar now i have to pay 17 times for basically a health care/engine business with a whole lot of crust in it that i have to chip away to get it that's too expensive i think the stock is worth 13 bucks, that's what i think i think it will visit there. but i'm still back with, tell me about the dollar
12:34 pm
when did you know and i didn't know i would like to know that answer why don't we ask one of those guys sometime? uncle kevin wants to know about the dollar >> we'll make sure we ask mr. flannery next time he's on >> i would like to speak to him. >> when will you start the class action suit? >> i'm not that kind of guy, i'm a nice guy but if someone else does the heavy lifting, i'll join it as a shareholder. >> have you ever watched "shark tank" reruns >> touche. but i have a right to ask for my dollar >> the stock is more of a short. i agree they should have bought new blood in flannery was complicit in the decline of this company. >> let me say, cramer, to his credit, has been waving the flag for shareholders with those kind of questions >> well, i'm one of them, and i'm not finished i want my dollar i want to know what happened to it >> if you take a look at the health care business, i just reviewed the third quarter 2017,
12:35 pm
fourth quarter will be out the 24th, health care grew organically 4% that's not a high growth company. aeronautics, engines, have the same growth. >> is it a no touch? >> i think it's no touch it's irresponsible for this company to pay dividends they've got unfunded obligations. it's upside down in its financials everybody knows they're selling assets i'm not so sure they can get more -- when you're a fire sale seller, how do you get more for your assets? >> i'm not second-guessing nygren, brilliant guy. but i like microsoft a hundred times, a hundred out of a hundred times, i'll take microsoft and jettison -- which i mild a bad buy on, i bought ge at 20.50, luckily got out with most of my backside intact at 18 bucks a share. it's a horrible slide in that company. by the way, priceline, one of the things that i really like
12:36 pm
about it is people don't focus on that they're a lender when they're buying these rooms, kevin, you know, they're going to a starwood or a marriott or wherever they're going and lending them money to get these rooms. they are a lender, scott and i think that's not priced into the model that's one of the reasons i really like -- >> what is the priceline pick? >> phenomenal. with the competition they've got, it's not just health care you bring up aeronautics aviation, i think there's more competition than nygren is thinking there is. that's why your $13 number makes sense to me. i think this name goes lower microsoft, why give up on that name based upon the growth that they have? and they're gaining on competition. they're gaining on aws, right, and the cloud. >> if the stocks goes down to 13 bucks, i'm going to ask all of you guys, and everybody is going to be wondering, they're themselves investors out there,
12:37 pm
okay, now is it a buy? i know if it goes down to 13, i know you guys will tell me not to do it >> is it a buy because they've done something if a stock drops, has it dropped for the right reason right now the stock could go to 13 for the right reasons is it worth buying has the management doesn't what they needed to do to change the opinion for the rest of us because if it's just about going from 17 to 13, no, it wouldn't be a buy >> good stuff. let's get the headlines with sue herera hello, scott, hello, everyone at this hour, a huge police presence in central pennsylvania after a suspect opened fire on law enforcement officials. a u.s. marshals task force was serving a warrant when the shooting occurred, killing one officer and injuring two others. >> there was a search warrant -- rather, an arrest warrant that was being served and there were shots that were fired. and we're conducting an investigation on the use of that force. there is no current danger to
12:38 pm
the public the person who used that others in is not at large amazon has whittled down to 20 the list of cities in contention to host its second north american headquarters. 238 locations initially made bids, hoping to attract billions of dollars in investment and up to 50,000 high paying jobs some of the finalists include boston, atlanta, newark, new jersey, new york city, and austin, texas. and burger king is looking to start a beef with mcdonald's, launching its own quarter pound burger it comes as mcdonald's is working to swap out frozen beef patties for fresh ones burger king says it uses frozen patties. we'll keep you posted. scotty >> now i'm hungry. >> sorry about that. >> sue herera joining us there big options moves, the trades jon and peter are making today based on what they see in the options market, next plus two very different
12:39 pm
positions on big blue. "halftime report" continues in two minutes.
12:40 pm
we've been preparing for this day. over the years, paul and i have met regularly with our ameriprise advisor. we plan for everything from retirement to college savings. giving us the ability to add on for an important member of our family. welcome home mom. with the right financial advisor, life can be brilliant. of emerging markets obsolete? at pgim, we see alpa in the trends, driving specific sectors of out performance. where a rising middle class powers a booming auto industry.
12:41 pm
a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential.
12:42 pm
jon and pete have made their way to the telestrator unusual activity time. >> let's start off with snap they came scrambling in here in snap and bought calls. obviously you can see these couple of bottoms that it's put in right around this $11 mark. is it finally time that it gets a breakout they've got earnings coming up, about two weeks. that's how long i'm going to hold these calls they're buying the 15 calls. with the stock at basically 14 bucks, they're buying the 15s here in snap i jumped in on those i'll probably hold these in the neighborhood of two weeks because that's when earnings are. >> it sounds like a dice rock, doc. >> but it's a cheap shot cheap shot really cheap shot. these options i believe were under 60 cents, pete, that they were paying for these. so i can have the upside of snap
12:43 pm
for 60 cents and who knows, do they some partnership, anything else they might possible announce as earnings that could be a good thing for the stock. i'm willing to roll the dice take a look at on semiconductor. 24.80, it got an upgrade today they took the target all the way up to 29 that's a gutsy call ahead of earnings, like i say, two weeks out they were buying the 25 calls out in april so the thing to focus on there is, it's not just a short term pop. somebody wants to be in for the longer term because these options are out there four months -- >> the spring, that's a long time >> yep i'll probably get rid of half of the trade after the earnings announcement, hold onto the rest and start selling calls. >> pete? >> jon was talking about something out there a little ways in the future i think we're starting with apple. yes, we are. we were talking about all the different reasons, repatriation,
12:44 pm
everybody else july $20.10 calls bought today, 5,000 of those, between 2.70 and $2.97 is what they were paying, pretty big buying in apple i actually added this, i bought these calls, i already own the stock. i owned the stock forever, it seems like i'll continue to hold it these options, i'm going to be in these all the way through july i think this thing is actually going to continue to move to the upside i got one more for you >> i don't remember either of you ever going that long, a holding period of six months where these options are dated. >> every once in a while we'll get something out three, four, five, six months i would prefer closer because you're paying for that time premium, scott but they went to july, i went to july so i'll hold onto these quite a while and give this time to move to the upside, maybe even get through that areas lowe's is the other one. just a little over a week ago, that stock was trading under 95 at the time. took a huge run up today the stock trading right around this level.
12:45 pm
they're rolling out of some of which their big profitable calls. back then they were buying 29,000 of the calls. now all of a sudden today they're buying 5,000 of the march calls as well to the upside you can see these march 105s, very aggressive call buying there. i'm in the stock, not in these calls. i like what's happening in lowe's. timekeeper will smack me upside the head. what's your take >> the question is has the model changed enough >> stocks had a nice move. >> i know, but, you know -- >> like a big upgrade. >> this is not like microsoft switching its ceo and changing the whole business model, which they did very successfully this is more of the same, maybe. >> pete, somebody took this, yesterday, i think it was, from sell to buy, underweight to overweight >> pretty aggressively with a 192 target so i'm long the stock, i've been long a little while now. i sell calls almost every month. what i love about expiration
12:46 pm
cycles is the premium gets really, really big because the volatility starts to move up let's use 165 as a price range you're going to sell the upside call that gives you room up to 173. it also protects you to the downside that's what i've gone on right now. if the stock is anywhere between these numbers, i'm going to make some money >> come on back over this way. we'll step away for a moment when we come back, goldman sachs, their big call on a railer first, a look at what's coming up on "power." should investors be worried about a potential government shutdown will the buying keep coming during the shutdown if we get one? what apple's repatriation really means for that company and maybe the entire u.s. economy. amazon creating a frenzy, announcing its 20 finalists for the city that may host its second headquarters. who really has the upper hand? we'll try to bakre it down more "halftime report.
12:47 pm
back after this. not exactly a fortune. well, a 103 yeah, 103. well, let me ask you guys. how long did it take you two to save that? a long time. then it's a fortune. well, i'm sure you talk to people all the time who think $100k is just pocket change. right now we're just talking to you. i told you we had a fortune. yes, you did. getting closer to your investment goals starts with a conversation. schedule a complimentary goal planning session today. today's senior living communities have never been better, with amazing amenities like movie theaters, exercise rooms and swimming pools, public cafes, bars and bistros even pet care services. and there's never been an easier way to get great advice. a place for mom is a free service
12:48 pm
that pairs you with a local advisor to help you sort through your options and find a perfect place. a place for mom. you know your family we know senior living. together we'll make the right choice.
12:49 pm
12:50 pm
(nadia white) the moment a fish is pulled out from the water, it's a race against time. and keeping it in the right conditions is the best way to get that fish to your plate safely. (dane chauvel) sometimes the product arrives, and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred. (tom villa) we took our world class network, and we developed devices to track environmental conditions. this device allows people to understand what's happening with the location, but also if it's too hot, if it's too cold, if it's been dropped... it's completely unique. (dennis woloshuck) if you have a sensor that can keep track of your product, it keeps everybody kind of honest that way. who knew a tiny sensor could help keep the food chain safe?
12:51 pm
12:52 pm
welcome back to "the halftime report. bitcoin is showing a selloff does that have something to do with the action that we're seeing today >> certainly, jackie there was a lot of action around that as traders tried to let that settle out. it's to be expected that we will get a lot of volatility. couple that with the seasonal trade. mid-december to mid-january, it
12:53 pm
has had significant selloffs during that time period. now that we're through that seasonality of the trade, we'll see if that pushes higher. we'll see if we can recover. >> do you think we can get to 12 or 13,000 again? >> you know, 13,000, i think, is a little oit of tut of the quesn as long as there's still the threat of regulation and/or possible shutdown as some of these exchanges in asia, i wouldn't sell any of these rallies. >> today on the live show, we're joined by peter boockvar plus, john kilduff he breaks down crude's recent n. l at the top of the hour l at the top of the hour futures@cnbc.comlio.
12:54 pm
since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.
12:55 pm
12:56 pm
where can investors seek pin an uncertain world? pgim sees alpha in real assets. like agriculture to feed the world. and energy to fuel its growth. real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time
12:57 pm
from over one hundred fifty billion dollars in real assets. partner with pgim. the global investment management businesses of prudential. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage.
12:58 pm
fidelity, where smarter investors will always be. it's abor it isn't. ence in 30,000 precision parts. it's inspected by mercedes-benz factory-trained technicians. or it isn't. it's backed by an unlimited mileage warranty, or it isn't. for those who never settle, it's either mercedes-benz certified pre-owned, or it isn't. the mercedes-benz certified pre-owned sales event. now through february 28th. only at your authorized mercedes-benz dealer. dad promised he would teach me how to surf on our trip. when you book a flight then add a hotel you can save. 3 waves later, i think it was the other way around... ♪
12:59 pm
everything you need to go. expedia. all right. we're back walmart, the conviction by goldman. >> yes and a focus list the day before. for all the reasons that they like walmart right now, i would convert it over. i know you know where i'm going. to target. it's for the same reasons that they love walmart right now that i think you could also say this supplies to target. >> agree >> trades at a much lower risk >> i was at target yesterday at the headquarters meeting with the team it blew me away. >> there you go. >> i thought they were old school they are not they have really smart, young people doing a transition. that company is going to do amazing things online. >> brian o'leary >> let's do final trades in the
1:00 pm
20 seconds that we have left. >> western digital is a trading stock. 79 to 85 meek mi microsoft, unusual call activity. >> that was peter brady. you're right >> i do not own ge i sold it in december. >> that does it for us thanks for watching. "power" starts now. i'm melissa lee. shutdown countdown only two days to go until a market shutdown. right now the votes don't add up in this record-breaking rally, general electric is tanking but boeing is flying high is ge a victim of short termism? we'll break that down. and a $350 billion question. what it means are to the

31 Views

info Stream Only

Uploaded by TV Archive on